During the COVID-19 pandemic, a North Carolina business owner used falsified documents to apply for the Paycheck Protection Program (PPP) and received over $3.5 million in federal relief funds. According to the US Attorney’s Office for the District of New Jersey, on July 17, 2024, 61-year-old North Carolina resident Lisa Smith pleaded guilty in federal court in Camden, New Jersey.
Court documents reveal that in early 2021, Smith, who then managed two companies, submitted PPP loan applications containing forged bank statements and IRS tax forms. These applications inflated the companies’ number of employees and payroll expenses, resulting in $125,000 of fraudulent loans. Additionally, Smith and her associates assisted others in submitting similar fraudulent applications. Due to these falsified financial documents and misleading information about the number of employees and wage costs, 29 PPP loans were approved, totaling over $3.5 million.
The maximum penalty for conspiracy to commit bank fraud is 30 years of imprisonment and a $1 million fine; sentencing in this case is scheduled for November this year.
The Coronavirus Aid, Relief, and Economic Security Act (CARES), enacted in March 2020, aimed to provide emergency financial assistance to millions of Americans facing economic impacts from the COVID-19 pandemic. One of the programs established under this act was the Paycheck Protection Program (PPP), which offered billions of dollars in forgivable loans to small businesses to retain employees and cover certain expenses.
It is crucial for individuals and businesses to adhere to the rules and regulations set forth in these relief programs to prevent fraud and misuse of federal funds during times of crisis. Cases like this serve as a reminder of the importance of transparency and honesty in accessing assistance meant to support those in need during challenging times.